Mortgage Rates Are Low: Why Aren’t Minority Homeowners Refinancing?
With mortgage interest rates at record lows, it’s no surprise that millions of homeowners are rushing to refinance their loans. But a new report from Federal Reserve economists shows a surprising gap between white and minority borrowers who are taking advantage of the savings.
From January 2020 to October 2020, only 6% of Black homeowners refinanced, compared with nearly 12% of white homeowners, according to the report, which also revealed a significant racial gap in past-due mortgage payments during the pandemic.
Another recent survey from Freddie Mac found that almost half of Black and Hispanic borrowers could save $1,200 a year by refinancing, yet they are doing so at substantially lower levels than white borrowers.
Wharton real estate professor Benjamin Keys wants to see that gap closed.
“I always think of mortgage refinancing as the one financial decision that households leave a lot of money on the table by failing…